On behalf of the
council and management of The Nigerian Stock Exchange (NSE), it gives me utmost
pleasure to welcome you to the annual ETPs Conference tagged “Exchange Traded
Products: Evolving investment themes, Accessing New Markets and Enhancing
Portfolio Alpha”. We are indeed pleased to host this event, the fourth in a
series of expository discussions and strategic dialogue on the development of
the ETPs market in Nigeria.

ETPs are one of
the most significant financial innovations in recent decades and have shaped
the financial markets. Since the introduction of ETPs in 1993, they have gained
widespread acceptance in most developed markets. Over the last 15 years,
investors’ demand for ETPs (both retail and institutional) has grown
remarkably, which in turn has led to a greater variety of products offered by
ETP sponsors.

Globally, ETPs
have grown remarkably this year recording net flows of approximately $358bn as
at October 2018. According to ETFGI, the Global ETP industry had close to
15,000 ETPs listings on 71 exchanges with assets of about US$5tn cutting across
392 providers at the end of October 2018.

It is interesting
to note that equity-based ETPs make up 76.7% of global ETP listings whilst
Fixed Income based ETPs represent 16.7% of listings, similar to the asset split
in Nigeria.

The cross-listing
of ABSA’s Newgold ETF on the Nigerian Stock Exchange in December 2011, opened
up the ETPs market. Since then, the ETPs space has grown steadily by a
cumulative average growth rate of 8% over the last 4 years. Currently, there
are 9 ETPs listed on the Exchange – 2 thematic ETFs providing access to
Pension-compliant and Shariah-compliant stocks, 2 broad equity market ETFs
tracking the NSE 30 Index, 3 sector based ETFs, 1 commodity ETF, and 1 bond ETF
tracking exposure to benchmark FGN Sovereign Bonds.

The introduction
of ETPs is one of the Exchange’s strategy to enhance diversification as well as
broaden the options available in the capital market to support the efficient
implementation of investment strategies across diverse asset classes and
instruments.

I would like to
use this medium to encourage ETP product issuers and intermediaries to expand
their footprint by broadening distribution channels, introducing other asset
classes/strategies, entering new markets, leveraging technology and data
analytics to understand the market and demand. This year, in collaboration with
issuers, we have focused on diversifying the ETPs space by supporting new
product development and thus expect the launch of new ETPs in the short term.

Today, we are
gathered to expand the discourse on ETPs in terms of enhancing domestic
capacity as well as improving collaboration amongst participants in the
ecosystem - product strategists, issuers, intermediaries, advisers, investment
managers and investors.

This conference
is aimed at providing insights on emerging themes as well as foster
understanding of ETPs as convenient vehicles and investment management tools
for accessing other markets.

Discussions at
this conference will amongst other things;

Seek
to identify solutions to challenges in the domestic market, as well as consider
the potential for cross border listing of securities in Africa;

Expand the dialogue regarding the integration of
African Financial Markets via the issuance of ETP vehicles and Depository
receipts;

Provide the investment advisory and broker-dealer
community with an understanding of their roles in distribution and capital
mobilization, as well as

Provide direction to ETP Issuers to support product
development efforts in the medium term.

Leading today’s
all-important conversations are two of the most recognized ETF strategists out
of Europe and Africa – Ms. Debbie Fuhr and Mrs. Nerina Visser as well as a
carefully selected panel of thought leaders across Africa’s investment
management industry. I thank our speakers for their support and valuable
perspectives and all our distinguished guests for making time to be here.

Let me conclude
by expressing our gratitude to our sponsors – ABSA, Meristem Wealth Management,
Stanbic IBTC Asset Management, Vetiva Capital Management, Afrinvest Asset
Management, Lotus Capital and the Fund Manager’s Association of Nigeria (FMAN)
for their kind contributions to this event as well as their unwavering support
and commitment to the growth of the ETP segment of our market.

Finally, to the
team at the Exchange that put this conference together – thank you very much
for your efforts in making this a successful event.

I trust that this
conference will provide in-depth coverage of the various benefits of ETPs as
well as address trends in the global and domestic ETPs space in terms of
adoption, disruption and evolving investment strategies. I urge us to
participate actively and look forward to fruitful discussions.